Presentation to Fixed Income Investors - Munich, September 2020 - HypoVereinsbank

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Presentation to Fixed Income Investors - Munich, September 2020 - HypoVereinsbank
Presentation to
Fixed Income Investors

Munich, September 2020
Presentation to Fixed Income Investors - Munich, September 2020 - HypoVereinsbank
Agenda

•1 HypoVereinsbank at a glance
•2 Update on latest results
•3 Funding
•4 Cover pool
•5 Annex
•6 Contacts

2
150 Years – from Bayerische Vereinsbank to UniCredit Bank AG
 1   2   3   4   5   6                                                                 HypoVereinsbank at a glance

Founded in 1869 as “Bayerische Vereinsbank AG” the   Since 2016 the HVB Tower has become Headquarter of the
business was started in Munich, Bavaria              UniCredit Bank AG

Headquarter of the Bayerische Vereinsbank in 1884

3
Part of a simple successful Pan European UniCredit, HypoVereinsbank has
an excellent market position in the strong German economy
1       2     3    4     5     6                                                                                                                                          HypoVereinsbank at a glance

    Excellent market position                  Top 3 German private bank1

    Strong operating performance               EUR 496 m profit before tax (HY2020)

    Excellent leverage ratio                   3.9% (fully loaded, HY2020)

    Outstanding capital ratio                  16.3% (CET1 fully loaded, HY2020)

    Strong balance sheet                       EUR 318 bn (HY2020)

    Highly qualified workforce                 12,070 FTE (HY2020)

                                               Part of UniCredit, a simple successful Pan
    Member of UniCredit Group
                                               European Commercial Bank with a fully plugged
                                               in CIB and a strong and global banking network

            General remark Unless stated otherwise “HypoVereinsbank” refers to UniCredit Bank AG and its subsidiaries in this document
            1HypoVereinsbank ranked as top 3 German private bank. Peer group “Bankengruppe der Großbanken” as defined by Deutsche Bundesbank. Based on Total Assets as of FY2019
4
Resilient business model: Well balanced with access to a wide range of
national and international clients
1   2     3     4     5     6                                                                                                                                       HypoVereinsbank at a glance

Commercial Banking                                                                                           Corporate & Investment Banking
• Corporate                                                                                                  International competence centre for UniCredit S.p.A. and fully plugged
  The “go to” bank for the German Mittelstand                                                                into Commercial Banking
• Retail                                                                                                     • Financing & Advisory (F&A)
  First mover in modernization of branch network                                                               Access to leading capital raising & financing solutions
  with extended digital services                                                                             • Markets
• Private Banking & Wealth Management                                                                          Top class solutions across multiple asset classes & channels
  Solid market position in growing German market                                                             • Global Transaction Banking (GTB)
                                                                                                               Best-in-class cash management, export, trade and supply chain
                                                                                                               finance as well as securities services

#2 Private sector lender for                                                                                    #2 All German syndicated loans:                #2 German corporate loans:
                                                       Best bank for German mid cap2
German mid caps1                                                                                                12.6% market share4                            14.3% market share4

                          Private Banking: Summa cum                                                                                        #1 All German bonds in EUR:
                          laude3                                                                                                            10.2% market share4

        1Source: Internal analysis, 2Source: Focus Money survey, 10/08/2016, 3Source: Handelsblatt Elite Report 2017, 4Source: Dealogic, 1 Oct 2019

5
Agenda

•1 HypoVereinsbank at a glance
•2 Update on latest results
•3 Funding
•4 Cover pool
•5 Annex
•6 Contacts

6
HypoVereinsbank with positive business performance in the extremely
challenging market environment in 2020
1                   2   3   4    5     6                                                                                                  Update on latest results

                        Operating income                                                                    EUR 2,175 m    EUR 2,381 m                +9.5%

                        Operating costs                                                                     EUR -1,719 m   EUR -1,407 m               -22.1%
    Profitability

                        Operating profit                                                                      EUR 456 m      EUR 974 m               +113.6%

                        Net write-down of loans and provisions for guarantees and commitments                 EUR -80 m     EUR -467 m                   -

                        Net operating profit                                                                  EUR 376 m      EUR 507 m               +34.8%

                        Profit before tax                                                                     EUR 677 m      EUR 496 m                -36.5%
                                                                                                            30/06/2019     30/06/2020                   ∆
                        Total assets                                                                         EUR 295 bn     EUR 318 bn                +7.8%
Balance
 sheet

                        Shareholders’ equity                                                                 EUR 17.6 bn    EUR 15.9 bn               -10.7%

                        Leverage ratio (Basel III, fully loaded)                                                   4.9%           3.9%                   -

                        Common Equity Tier 1 ratio (fully loaded)                                                 19.4%          16.3%                -310bp
Regulatory
  ratios

                        Risk weighted assets (including equivalents for market risk and operational risk)    EUR 82.6 bn    EUR 89.6 bn               +3.5%

                        Liquidity Coverage Ratio (LCR)                                                           >100%          >100%                    -

7
Healthy balance sheet provides sound base for sustainable growth and
business continuity
1      2     3     4      5     6                                                                                                                   Update on latest results

            Capital (CET1 fully loaded)                                   Leverage ratio (Basel III, fully loaded)                  Risk-weighted assets1
                               in %                                                             in %                                            in EUR bn

                                                                                                                                         78.7        82.6    85.5
                  21.1        19.9       17.5
                                                                                        5.1      4.9       4.3

                 FY2017    FY2018      FY2019                                         FY2017   FY2018    FY2019                         FY2017     FY2018   FY2019

    • Continuously excellent capital base by both                        • The leverage ratio decreased over the last 2   • The total risk-weighted assets determined in
      national and international standards.                                years.                                           accordance with Basel III requirements
                                                                                                                            amounted to EUR 85.5 billion at year-end
                                                                                                                            2019 and were thus EUR 2.9 billion higher
                                                                                                                            than year-end 2018 and EUR 6.8 billion higher
                                                                                                                            than year-end 2017.

           1Including equivalents for market risk and operational risk

8
Agenda

•1 HypoVereinsbank at a glance
•2 Update on latest results
•3 Funding
•4 Cover pool
•5 Annex
•6 Contacts

9
Well diversified and centrally coordinated funding and liquidity profile
1    2     3     4     5     6                                                                                                                                                 Funding

                                                                                                                     UniCredit SpA acts as the Group Holding as well as the
                                                                                                                        Italian operating bank and is the TLAC/MREL issuer under
                                                                                                                        Single-Point-of-Entry (SPE)
                                                                                                                     Coordinated Group-wide funding and liquidity
                                                                                                                        management to optimise market access and funding costs
                                                                                                                     Diversified by geography and funding sources
                                                                                                                     All Group Legal Entities to become self-funded by
                                                                                                                        progressively minimising intragroup exposures

                                                                           CEE Banks
                        Western Europe
                                                                       (10 CEE countries1)

         1Bosnia and Herzegovina, Bulgaria, Croatia, Czech Republic, Hungary, Romania, Russia,   Serbia, Slovakia, Slovenia

10
HypoVereinsbank: Funding and liquidity management
1    2       3   4        5    6                                                                                                                      Funding

 • UniCredit Bank AG, as the German subsidiary of UniCredit SpA, manages its liquidity and funding on the base of the policies of the Group, exploiting the
   opportunity to leverage on its unique funding base, also geographical, with a solid mix of instruments.
 • The activities are coordinated Group wide and are based on a common framework, to optimise market access and funding costs
 • The funding strategy aims at:
     -     Covering the bank's needs at limited cost
     -     Limiting the maturity mismatch between assets and liabilities
     -     Optimising the projected cash flows

 UniCredit Bank AG is active as Issuer in the following instruments:                               A leading Pfandbrief issuer: EUR 21.3bn1 Covered bonds
                                                                                                   outstanding
                                                                                                   • 87% mortgage covered bonds
         •   Mortgage and public covered bonds ("Pfandbriefe")                                     • 13% public sector covered bonds
         •   Private placements
         •   Retail issues                                                                         Funding as of 30/06/2020:
         •   Registered notes secured and unsecured                                                • Nearly 66% of the outstanding wholesale funding is issued
         •   French CD                                                                               in covered bonds
                                                                                                   • Senior unsecured funding mainly in structured format

         1Figure as of   30/06/2020 (net volume)

11
HypoVereinsbank’s funding mix: Sustainable, diversified and risk adjusted
1    2       3    4     5     6                                                                                                                                                                            Funding

Strict three-pillar funding strategy1:                                                                                     Split of outstanding issuance1 by instrument type
• Sustainability                                                                                                                                               in %
   • Solid medium/long term funding with constant presence on the
      debt capital market
                                                                                                                                                                   0.3%
   • Declining outstanding issuance volume within a sound balance
      sheet structure (2010: >EUR 62bn; 2Q/2020: EUR 32.5bn)
• Diversification                                                                                                                            34.1%
   • Diversification and activity in all channels to avoid
      concentration risk especially with regard to seniors                                                                                                  EUR 32.5 bn

   • Covered bonds ("Pfandbriefe") as important source of funding                                                                                                                    65.6%
      due to cost-efficiency, first-class credit quality and high degree
      of safety for investors
• Risk Management
   • Maturity diversification to avoid concentration risk
                                                                                                                                         Senior    Subordinated     Securitisation   Pfandbriefe

         1   Figures as of 30/06/2020, Net volume of senior, subordinated and covered bonds “Pfandbriefe" and securitizations of UniCredit Bank AG and their subsidiaries (without own issuances held on
             own books); Positions within UniCredit Group are excluded, except held for trading purposes
12
Medium-Long Term Funding: Solid and diversified funding structure
1    2       3     4     5      6                                                                                                                                                       Funding

HypoVereinsbank’s funding risk continues to remain                                                                         Funding volume and breakdown of funding sources1
on a low level due to                                                                                                                                          in EUR bn
• Use of various channels
                                                                                                                                                                           7.4
• Wide range of funding products
• Issuance in multiple asset classes and markets                                                                             5.7
• Well diversified group of investors
                                                                                                                                                                                  3.9
                                                                                                                                                      3.0

                                                                                                                                                                                         2
                                                                                                                            2017                    2018                   2019   2020

                                                                                                                             Unsecured Private Placements & Schuldscheine
                                                                                                                             Unsecured Retail Placement
                                                                                                                             Public Sector Covered Bonds
                                                                                                                             Mortgage Covered Bonds

         1   Calculation incl. forward transactions, without Other M/L Term Funding and Supranational Funding, Positions within UniCredit Group are excluded
         2   executed funding volume until 30/06/2020
13
Ratings of HypoVereinsbank reflect robust business model and strong
focus on the German market
1    2     3    4     5     6                                                                                                      Funding

                                                                                                           Derivative Counterparty Rating:
                                    Counterparty Rating: A1/-/P-1     Resolution Counterparty Rating:
                                                                                                                      BBB+(dcr)
 Long-                                 Deposits: A2/neg/P-1                       A-/-/A-2
                                                                                                                Deposits: BBB+/-/F2
 term/Outlook/                         Issuer Rating: A2/neg        Issuer Credit Rating: BBB+/neg/A-2
                                                                                                         Issuer Default Rating: BBB/neg/F2
 Short-term                           Sen. Unsec.: A2/neg/P-1             Sen. Unsec.: BBB+/-/A-2
                                                                                                              Sen. Preferred: BBB+/-/F2
                                        Jr. Sen. Unsec.: Baa3                Sen. Subord.: BBB
                                                                                                           Non-Preferred Sen. Unsec.: BBB

 Stand-alone Rating                             baa2                              bbb+                                 bbb

 Public Sector
 Covered                                       Aaa/-                                -                               AAA/stable
 Bonds/Outlook

 Mortgage Covered
                                               Aaa/-                                -                             AAA/negative
 Bonds/Outlook

         Ratings as of 26/08/2020

14
Agenda

•1 HypoVereinsbank at a glance
•2 Update on latest results
•3 Funding
•4 Cover pool
•5 Annex
•6 Contacts

15
From the first Communal Obligation in 1871 to the USD Public Pfandbrief
in 2019
1    2   3   4   5   6                                                                Cover pool

                                      • In 1869 the “Bayerische Vereinsbank” received the
                                        permission to issue Pfandbrief
                                      • Since this time the Pfandbrief has always been one of
                                        the main refinancing instruments of the bank and
                                        HVB has established itself as a permanent issuer in
                                        the Capital markets
                                      • 150 years (and billions of Pfandbriefe) later it was
                                        about time to launch the first USD denominated
                                        Public Pfandbrief

16
HypoVereinsbank and its Pfandbrief History
 1    2    3    4    5    6                                     Cover pool

King Frederick II decreed the first mortgage bond in
                                                         1769
Germany, referred to as “Pfandbrief”

King Max II introduced the modern Pfandbrief system in
                                                         1864
Bavaria

Foundation of Bayerische Vereinsbank                     1869

Formation of a powerful mortgage bank: HypoVereinsbank
Merger of Bayerische Hypotheken- und Wechsel Bank and    1998
Bayersische Vereinsbank

HypoVereinsbank becomes part of UniCredit Group          2005

17
HypoVereinsbank’s cover pool at a glance: A strong Pfandbrief house
1        2     3       4     5     6                                                                                                                                      Cover pool

As of 30/06/2020                       Mortgage           Public                                     Total cover pool – Split mortgage and public sector
Pool type                                       Dynamic
                                                                                                                             2Q2020

Cover pool (EUR m)                                                                               Mortgage pool                               Public sector pool

     Nominal value1                         28,392              5,324

     Net present value                      32,463              6,118
                                                                                                    2.0%
     Substitute assets                          565                 0
                                                                                                                                          28.9%

Total number of loans                      151,988              1,741                    29.9%

Fixed rate loans                             80.3%             65.4%                                 EUR                                              EUR
                                                                                                    29.0 bn                                          5.3 bn
Floating rate loans                          19.7%             34.6%
                                                                                                                                      0.4%
                                                                                                                     68.1%                                             48.1%
Outstanding issues (EUR m)                                                                                                              22.6%

     Nominal value                          23,207              3,631                                                                           Local authorities
                                                                                                 Residential
     Net present value                      24,991              4,039                            Commercial                                     Regional authorities
                                                                                                 Substitute assets                              Other
Overcollateralisation2                       24.8%             46.6%                                                                            State

             1Excluding substitute  assets
             2OC   calculated with nominal values of cover pool and outstanding issues
18
Mortgage cover pool with purely German assets
 1   2     3     4      5        6                                                                                                                                                                                Cover pool

• As one of the oldest Pfandbrief players in
  Germany, HypoVereinsbank is well                                                            Cover pool HypoVereinsbank2                                                   Cover pool all vdp-members2
  acquainted with the characteristics of                                                                2Q2020                                                                        2Q2020
  the highly regulated German market
• With exclusively German assets in the                                                                       0.00%
                                                                                                                                                                                1.0% 4.8%
  mortgage cover pool, HypoVereinsbank                                                                                                                                     11.1%
  benefits from the country's solid and
  reliable economic situation
• With 17 percent, the non-German                                                                             EUR                                                                           EUR
                                                                                                             28.4bn1                                                                      295.3bn
  exposure of the members of the
  Association of German Pfandbrief Banks
  (vdp) is substantially higher compared to                                                                                        100.0%                                                                      83.1%
  HypoVereinsbank
                                                                                                          Germany                                                        Germany                        EUR Core
                                                                                                          EUR Core                                                       EUR Periphery                  Rest of world

         1Without further cover assets
         2EUR Core: B, DK, F,   FIN, GB, LUX, NL, AUT, PL, S, CZ, LIE, EU; EUR Periphery: BUL, EST, GR, IT, IRL, LET, LIT, MALT, PORT, RO, SLO, SK, ESP, HU, CY ; Rest of world: ISL, NOR, CH, JAP, CAN, USA
19
Mortgage cover pool with solid foothold in economically strong Bavaria
 1   2     3     4      5     6                                                                                                                                       Cover pool

• HypoVereinsbank mortgage cover pool is                                         Mortgage cover pool by location1                    Mortgage cover pool by size1
  mostly concentrated in economically                                                       2Q2020                                          2Q2020 in EUR m
  strong federal state Bavaria where the                                                                                                                      Total EUR 28,392m

  bank has strongest presence                                                                 2%
                                                                                         5% 2%
                                                                                        1%
• The non-Bavarian mortgage cover pool is
                                                                                     12%
  well diversified between the capital
  Berlin and the remaining federal states                                            6%            EUR             44%
                                                                                                  28.4bn 1
• Mortgages of up to three hundred                                                   5%
  thousand Euros account for almost 50                                                 2%                                 10,682.8
  percent of the entire mortgage cover                                                      9%
  pool basing it on a wide an solid                                                              5% 2% 5%
                                                                                                                                                     6,417.0        6,635.6
  foundation
                                                                                                                                         4,656.5
                                                                                            Bavaria
                                                                                            Baden-Wuerttemberg
                                                                                            Rheinland-Palatinate
                                                                                            Hesse
                                                                                            North Rhine-Westphalia
                                                                                            Lower Saxony                   EUR 0-       EUR 300 k-   EUR 1 m-     more than
                                                                                            Schleswig-Holstein            EUR 300k       EUR 1 m     EUR 10 m     EUR 10 m
                                                                                            Other Western German States
                                                                                            Berlin

         1Without further cover assets in   accordance with section 19 (1) PfandBG

20
High quality mortgage cover pool due to consistent risk management
 1   2     3       4    5     6                                                                                                                                                                      Cover pool

Consistent risk management                                                  Risk map residential real estate1                                          Loan-to-value limits
                                                                                                                                                       for retail and private banking clients
• Internal risk map based on empirical
  data from decades serves as basis for                                                                 5%                                              Division          Risk color            LTV limit2
  Loan-to-value (LTV) limits
                                                                                                      4%                3%
• All focus areas of HypoVereinsbank’s                                                                                                                                                  Owner-
                                                                                                                                                                                                       Buy to let
                                                                                                                                                                                       occupied
  mortgage cover pool in low risk regions                                                   2%
                                                                                                                                 12%
• Majority of the mortgage cover pool with                                                                     1%                                       Retail                              95%               80%
  a LTV
Investors benefit from high level of overcollateralization of outstanding
Pfandbriefe
1    2     3      4      5     6                                                                                                                                                    Cover pool

                              Total mortgage cover pool development and nominal overcollateralization in historical comparison
                                                                                                       in EUR bn
                                                                                                                                                                                   29.0
                                                                                                                                                                    28.6
                                                                                                                          26.4                       27.0
           25.4                                                                              25.9
                                        24.6                       25.3
                                                                                                                                                                    6.4            5.8

                                                                                                                                                      8
           9.0                                                                                8.8                         9.5
                                        8.7                       10.2

                                                                                                                                                                    22.2           23.2
                                                                                                                                                     19
          16.4                         15.9                                                  17.1                        16.9
                                                                  15.1
 2.21                         0.81                       0.81                       0.81                         0.51                        0.51           0.71           0.61
 +                            +                          +                          +                            +                           +              +              +
 23.22                        23.82                      24.52                      25,22                        25.92                       26.52          27.92          28.42

          2013                          2014                       2015                     2016                         2017                        2018           2019           2Q2020
                                                                                         Mortgage Pfandbriefe        Overcollateralisation

         1Further cover assets in  accordance with section 19 (1) German Pfandbrief Act
         2Mortgage    cover assets: There are no derivatives and foreign currency assets used as cover for Mortgage Pfandbriefe
22
High percentage of long lasting client relationship minimizes risk
1    2   3   4   5    6                                                                                             Cover pool

                                              Cover pool mortgages (nominal) per closing date
                                                                  in EUR m
                                                                                            11,627

                                                                  6,101
                                                                                                          5,015
                                      3,201
             2,448
Excellent payment discipline: Arrear ratio1 below 0.005% for years
1      2    3       4      5     6                                                                                                                                                    Cover pool

                                                                                            Payments in Arrears
                                                                      in EUR m and % share of the mortgage cover pool (arrear ratio)

                        0.004%
            0.003%                   0.003%                                  0.003%
 0.002%                                       0.002% 0.002%                                                        0.002%   0.002%   0.002% 0.002%
                          1.0                                      0.001%      0.8
                                                                                        0.002%   0.001%   0.002%                                       0.001% 0.001%     0.001%   0.001% 0.001%
             0.8                      0.8                                                                                    0.6
     0.6                                        0.5       0.5       0.3                  0.4      0.4      0.4      0.5               0.5      0.5      0.4     0.4       0.4      0.4      0.4
 3Q2015     4Q2015 1Q2016 2Q2016 3Q2016 4Q2016 1Q2017 2Q2017                            3Q2017 4Q2017 1Q2018 2Q2018         3Q2018 4Q2018     1Q2019 2Q2019 3Q2019       4Q2019   1Q2020 2Q2020

                                                                                        Total mortgage cover pool
                                                                                                    in EUR m
                                                                                                                                                                27,910   27,848    28,284   28,392
                                                                                                                                              27,497   27,750
                        25,534                                                          25,758   25,930   26,300   26,551   26,561   26,514
24,380     24,577                    24,711   24,940    25,306    24,760     25,185

3Q2015 4Q2015 1Q2016                 2Q2016   3Q2016 4Q2016 1Q2017           2Q2017     3Q2017 4Q2017 1Q2018 2Q2018         3Q2018 4Q2018     1Q2019 2Q2019 3Q2019       4Q2019    1Q2020 2Q2020

           1Payments    more than 90 days overdue in relation to mortgage receivables

24
Well matching maturity profiles of mortgages and Pfandbrief issues
1    2   3   4     5     6                                                                                                        Cover pool

                             Maturity structure of outstanding mortgage Pfandbriefe versus related cover assets 2Q2020
                                                                          in EUR m

                                                                                                       10,006

                                                                                                                 7,577

                                                                                                                         5,966
                                                                                     5,322     5,068                               4,783

     2,725                        2,416                 2,522
                 2,136                     2,179
                                                                  1,464

         1-2 years            >2-3 years                    >3-5 years       >5-10 years        >10 years
                                                           Cover Assets        Mortgage Pfandbriefe

25
Overview of benchmark issues
1    2    3    4    5   6   7                                                                           Cover pool

COVERED Bonds – Benchmark issues since 2019
                                Initial Tenor and
Pfandbrief Type                                     Issued Volume   Issue Date   Maturity   Spread
                                  Interest Type

Mortgage Pfandbriefe             10Y. FXD RATE        EUR 0.50 bn    Jan-19       Jan-29    midswap +15bps

Mortgage Pfandbriefe            Tap 10Y. FXD RATE     EUR 0.50 bn    Feb-19       Jan-29    midswap +11bps

Mortgage Pfandbriefe              15Y. FXD RATE       EUR 1.00 bn    May-19      May-34     midswap +8bps

Public Sector Pfandbriefe         3Y. FXD Rate        USD 0.50 bn     Jul-19      Jul-22    Libor +32

Mortgage Pfandbriefe              5Y. FXD Rate        EUR 0.75 bn    Sep-19      Sep-24     midswap +3bps

Mortgage Pfandbriefe              8Y. FXD Rate        EUR 1.00 bn    Nov-19      Nov-27     midswap +4bps

Mortgage Pfandbriefe              12Y. FXD Rate       EUR 1.25 bn    Jan-20       Jan-32    midswap +6bps

Mortgage Pfandbriefe              10Y. FXD Rate       EUR 1.00 bn    Jun-20       Jun-30    midswap +10bps

26
Agenda

•1 HypoVereinsbank at a glance
•2 Update on latest results
•3 Funding
•4 Cover pool
•5 Annex
•6 Contacts

27
UniCredit Group - Strong footprint in Environmental, Social and
     Governance. Revised coal policy
                                                                                                                                         Annex – ESG

                                 E                                            S                                               G
                       Environmental                                        Social                                      Governance

          25.5bn of green/sustainable/ESG-linked loans     5.7bn social bonds for UniCredit customers, 8 deals   strong involvement of top management
          for our customers, 16 deals in 1H20              in 1H20                                               and BoD on ESG topics

          13.3bn of green/sustainability bonds and         >6.4bn loans to European SMEs for Covid-19            strengthening of managerial team to
          Schuldschein for our customers, 24 deals in      emergency                                             continuously update UniCredit ESG
          1H20                                                                                                   strategy and embed it further in the
                                                                                                                 DNA of the company
                                                           170m of loans from Social Impact Banking to
          6.4bn in renewable projects                      >4,000 beneficiaries through Microcredit and
                                                           Impact Financing                                      Chief Ethics Officer position created in
                                                                                                                 2019
          2.1bn of energy efficiency loans to
                                                           >38,000 students at 307 schools trained with
          individuals and SMEs in 1H20 in Western                                                                women in senior leadership at 14% and
                                                           financial education programmes
          Europe                                                                                                 on track to reach 20% target in 2022
                                                           UniCredit Foundation's strong role:
          stop financial support to controversial           - 4,600 projects supported with 48m donations        global policies in place against
          sectors like coal, Arctic and non conventional      by colleagues                                      harassment, sexual misconduct,
          oil & gas Revised coal                            - >18m for almost 300 scholarships and               bullying and retaliation
                              policy                          fellowships granted to 965 students and
                                                              researchers
     NB: Figures as of 1H20
28
UniCredit Group - Best practice commitment with total phase-out of coal
     sector in all markets by 2028
                                                                                                                                            Annex – ESG

       Comprehensive
      update of Nov 19        Clear commitment to fully exit coal sector financing by 2028 worldwide
        coal policy in        General financing available only to clients aligned with UniCredit commitments and that currently have less than
       early Aug 20 to         25% of revenues from thermal coal
          broaden
                              Zero general financing in all cases of expansion of coal operations (i.e. Coal Fired Power Plants acquisition or opening)
        commitments

      New and existing
      project financing      No financing for new projects and no new financing to existing projects
     remains aligned to
                             Zero exposure to thermal coal mining and coal fired power plant projects by 2023
         sector best
          practise

                          The Group proactively supports clients in accelerating transition to substantially improve their
                                                       environmental and social footprint

29
UniCredit Group - ESG ratings (1/2):
     MSCI rating upgraded to "A" (from "BBB")
                                                                                                                                                                          Annex – ESG
                                          Rating range                                                                                Comments
                      ESG Rating:                                                              Improved management of human capital drives the upgrade to 'A' from 'BBB' in Jun 20
                                                                                               On governance, the bank continues to lead most international peers (pay practices and
              A                                                                                 board structure)
                        CCC         B         BB        BBB        A            AA      AAA
                                                                                               Score penalised by financial system instability (controversies included)
                      ESG Risk Rating:
                                                                                               Medium exposure and strong management of material ESG issues
           Medium                                                                              UniCredit is noted for its strong corporate governance performance
                      Severe         High              Med            Low            Neg
            (25.6)                                                                             Ranked 69/374 – 19th percentile in the diversified banks subgroup (1st = lowest risk)
                      100 - 40      40 - 30        30 - 20        20 - 10            10 - 0

                      CDP Score:
                                                                                               UniCredit's 2019 "B" rating is higher than average "C" ratings for Financial services, Europe
              B           D                   C                   B                     A       and Global Average
                      Disclosure         Awareness       Management Leadership

                      ESG Rating:

             4.62                                                                              UniCredit is ranked in the 91st percentile of banks
                         0           1             2          3             4           5

                      Ratings and level of compliance:
             EE+                                                                               Only bank in Italy with an EE+ rating, strong compliance and the ability to manage key
             (Very                                                                              reputational risks
            strong)      F          FF            FFF         E         EE+            EEE

                       Worst level                                              Best level
30
UniCredit Group - ESG ratings (2/2)
                                                                                                                                                       Annex – ESG
                                          Rating range                                                                  Comments
                         ESG Score:                                              Environment scores 65 (Advanced)
               60                                                                Social scores 62 (Advanced)
           (Advanced)      0 - 29         30 - 49        50 - 59     60 - 100
                           Weak           Limited        Robust     Advanced     Governance scores 53 (Robust)

                         Sustainability Rating:
                B                                                                Rank in Bank type (Credit Institution Europe): 20/40
            (Positive)    DDD                                            AAA
                                                                                 Rank in Region (Europe): 55/120
                                                    B

                         Index Score:
                                                                                 UniCredit is the first bank in the Top 10 ranking (8/74)
             71.71                                                               UniCredit included in the Top 3 in the financial sector
                            0                              71.7         100

                         Corporate ESG Rating:
                                                                                 UniCredit is ranked among the 10% of companies within the sector with the highest
                C                                                                 relative ESG performance
             (Prime)                       -C+                          -A+
                          - D+                            -B+                    Rating as of 27 April 2020

                         Sustainability Score:                                   Unsolicited rating
               53                                                                The assessment is performed based on public sources without any active participation of
                           0                        53                   100      UniCredit

                         Worst level                               Best level
31
UniCredit Bank AG –
Initiation of a Green Loan Product Line in Real Estate Germany
                                                                                                                                                                                                                                       Annex – ESG
 Background                                                                         Key Messages                                                                                  Real Estate Green Loan - Use of Proceeds
     •   In the context of UCB's Sustainable Finance Task Force, Real                        Sustainable Finance - New Business Potential                                           •   All criterias for issuing a Real Estate Green Loan have evolved
         Estate Germany ("REG") identified substantial Green Loan                                                                                                                       from the EU Taxonomy and are compliant with vdp-standards
         business potential which enables UCB to issue a Green                       • ESG is an emerging business megatrend with comparably low market entry                           (Verband Deutscher Pfandbriefbanken), which represent the
         Pfandbrief in 2021.*                                                          barriers in the real estate sector                                                               national hub of taxonomy
                                                                                     • ESG-linked financing solutions mostly appropriate for listed real estate
     •   Furthermore, German sustainable new building standards as                     companies
         well as energy-efficient refurbishment activities are bearing
                                                                                      Due to high portfolio quality, asset-based Green Loans offer ca. EUR 300 –                   •   Use of Proceeds
         significant asset-based Green Loan potential going forward.
                                                                                       500mn p.a. new business potential within REG´s client base (same volume
     •   At all institutional investors, which represent the biggest group             expected in retail banking)                                                                      At least one of following Energy Efficiency & Green Building
         of real estate asset buyers, increasingly center investment                                                                                                                    criteria has to be fulfilled for both, residential and commercial
         decisions on ESG criteria.                                                                                                                                                     assets:
                                                                                             UCB "Green Pfandbrief"                                                                      Energy Performance Certificates (EPCs) with a minimum
     •   COVID-19 is expected to further catalyst this trend by
         impacting on medium-term real estate asset allocation and                   •   Aiming to address new investors by originating Green Pfandbrief as well as to                    energy performance “B” ≙ primary energy demand ≤
         thereby, REG's overall client base.                                             potentially profit from funding advantages in the long-run                                       75kWh/qm
                                                                                     •   Quick Win: manually already identified c. EUR 1.2 bn Green Loan exposure,                       KfW Co-Financing for new build as well as renovation
     •   Current market dynamics and timing allow UCB to be an early
                                                                                         whereof c. 0.6bn are in covered pool*                                                            (program KfW 40-100)
         adopter.
     •   In order to originate Green Loans, a UCB internal Real Estate                                                                                                                   Top 15% of national building stock by energy performance
         Green Loan Framework ("REGLF") has been designed.                                   Clients Initiatives
                                                                                                                                                                                         Primary Energy Demand reduction >30%
     •   In order to originate Green Loans, a UCB internal Real Estate               •   Real Estate Sustainable Finance Client Webinar in 16th July 2020 has
         Green Loan Framework ("REGLF") based on the EU Taxonomy/                        demonstrated UCB's Sustainable Finance & Advisory capabilities                                  External Certifications
         national hub vdp (Verband deutscher Pfandbriefbanken) has                   •   Selected institutional clients have been approached to discuss initial Green Loan
                                                                                                                                                                                            -   LEED   = Gold or more
         been designed.                                                                  origination and validate proposed Framework
                                                                                                                                                                                            -   BREEAM = Excellent or more
     •   REG´s target clients: Developers, Fund Managers/ Investors,                                                                                                                        -   DGNB = Gold or more
         KVGs, Property Companies/Managers/ Investors, Housing                               Involved Parties                                                                               -   HQE   = Very Good or more
         Corporations (WBGs).                                                       •    Efforts fully plugged in UCB SF Task Force

         *   Partial quick scan of REG's existing loan portfolio identified 17 assets to be labeled "Green" in accordance to proposed REGLF; loan exposure corresponding to c. EUR 1.2bn loan exposure /
32           internal market value of ca. EUR 2.3bn; within private client's asset-based portfolio, further 8.8k KfW co-financed assets identified as suitable / loan exposure totaling c. EUR 1.7bn
Agenda

•1 HypoVereinsbank at a glance
•2 Update on latest results
•3 Funding
•4 Cover pool
•5 Annex
•6 Contacts

33
Your contacts
1   2   3   4   5   6                                                                            Contacts

Corporate & Investment Banking

Holger Oberfrank                 Pier Mario Satta               Publication of Cover Pool data according
Co-Head of Treasury              Head of Finance                to § 28 Pfandbriefact:
Tel. +49 89 378-15100            Tel. +49 89 378-13040          https://www.hypovereinsbank.de/hvb/ueber-
Holger.Oberfrank@unicredit.de    PierMario.Satta@unicredit.de   uns/investor-relations-en/emissions-
                                                                collateral/data-on-collateral-pool

Imprint
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Arabellastraße 12
D-81925 Munich
Disclaimer
This publication is presented to you by:
Corporate & Investment Banking
UniCredit Bank AG
Arabellastr. 12
D-81925 Munich
The information in this publication is based on carefully selected sources believed to be reliable. However we do not make any representation as to its accuracy or completeness. Any opinions herein reflect our judgement at the date hereof and are subject to change without notice. Any investments presented in this report may be unsuitable for the
investor depending on his or her specific investment objectives and financial position. Any reports provided herein are provided for general information purposes only and cannot substitute the obtaining of independent financial advice. Private investors should obtain the advice of their banker/broker about any investments concerned prior to making
them. Nothing in this publication is intended to create contractual obligations. Corporate & Investment Banking of UniCredit consists of UniCredit Bank AG, Munich, UniCredit Bank Austria AG, Vienna, UniCredit S.p.A., Rome and other members of the UniCre dit. UniCredit Group and its subsidiaries are subject to regulation by the European Central Bank. In
addition UniCredit Bank AG is regulated by the Federal Financial Supervisory Authority (BaFin), UniCredit Bank Austria AG is regulated by the Austrian Financial Market Authority (FMA) and UniCredit S.p.A. is regulated by both the Banca d'Italia and the Commissione Nazionale per le Società e la Borsa (CONSOB).

Note to UK Residents:
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The information provided herein (including any report set out herein) does not constitute a solicitation to buy or an offer to sell any securities. The information in this publication is based on carefully selected sources believed to be reliable but we do not make any representation as to its accuracy or completeness. Any opinions herein reflect our
judgement at the date hereof and are subject to change without notice.
We and/or any other entity of Corporate & Investment Banking of UniCredit may from time to time with respect to securities mentioned in this publication (i) take a long or short position and buy or sell such securities; (ii) act as investment bankers and/or commercial bankers for issuers of such securities; (iii) be represented on the board of any issuers
of such securities; (iv) engage in “market making” of such securities; (v) have a consulting relationship with any issuer. Any investments discussed or recommended in any report provided herein may be unsuitable for investors depending on their specific investment objectives and financial position. Any information provided herein is provided for
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Notwithstanding the above, if this publication relates to securities subject to the Prospectus Directive (2005) it is sent to you on the basis that you are a Qualified Investor for the purposes of the directive or any relevant implementing legislation o f a European Economic Area (“EEA”) Member State which has implemented the Prospectus Directive and it
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EEA Member State which has implemented the Prospectus Directive.

Note to US Residents:
The information provided herein or contained in any report provided herein is intended solely for institutional clients of Corporate & Investment Banking of UniCredit acting through UniCredit Bank AG, New York Branch and UniCredit Capital Markets LLC (together “UniCredit”) in the United States, and may not be used or relied upon by any other person
for any purpose. It does not constitute a solicitation to buy or an offer to sell any securities under the Securities Act of 1933, as amended, or under any other US federal or state securities laws, rules or regulations. Investments in securities discussed herein may be unsuitable for investors, depending on their specific investment objectives, risk tolerance
and financial position.
In jurisdictions where UniCredit is not registered or licensed to trade in securities, commodities or other financial products, any transaction may be effected only in accordance with applicable laws and legislation, which may vary from jurisdiction to jurisdiction and may require that a transaction be made in accordance with applicable exemptions from
registration or licensing requirements.
All information contained herein is based on carefully selected sources believed to be reliable, but UniCredit makes no repre sentations as to its accuracy or completeness. Any opinions contained herein reflect UniCredit’s judgement as of the original date of publication, without regard to the date on which you may receive such information, and a re
subject to change without notice.
UniCredit may have issued other reports that are inconsistent with, and reach different conclusions from, the information pre sented in any report provided herein. Those reports reflect the different assumptions, views and analytical methods of the analysts who prepared them. Past performance should not be taken as an indication or guarantee of
further performance, and no representation or warranty, express or implied, is made regarding future performance.
We and/or any other entity of Corporate & Investment Banking of UniCredit may from time to time, with respect to any securities discussed herein: (i) take a long or short position and buy or sell such securities; (ii) act as investment and/or commercial bankers for issuers of such securities; (iii) be represented on the board of such issuers; (iv) engage in
“market-making” of such securities; and (v) act as a paid consultant or adviser to any issuer.
The information contained in any report provided herein may include forward-looking statements within the meaning of US federal securities laws that are subject to risks and uncertainties. Factors that could cause a company’s actual results and financial condition to differ from its expectations include, without limitation: Political uncertainty,
changes in economic conditions that adversely affect the level of demand for the company’s products or services, changes in f oreign exchange markets, changes in international and domestic financial markets, competitive environments and other factors rel ating to the foregoing. All forward-looking statements contained in this report are qualified in
their entirety by this cautionary statement.

Corporate & Investment Banking
UniCredit Bank AG
as of 2 September, 2020

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